Dmitry Medvedev: Sales tax is not to be introduced, but the regions get the right to apply special charges

24th September 2014

This is about, for example, charges for the right to trade, for the provision of catering services, taxi services, as well as tourist or resort charges

Russian government will retain the basic fundamentals of the tax system; the sales tax will not be introduced. This was stated by Prime Minister Dmitry MEDVEDEV at the plenary session of the XIII International Investment Forum “Sochi-2014”.

“We are not going to change our policy and we will adhere to the basic principles of macroeconomic policy. And the fiscal rule, and the basic fundamentals of the tax system, the basic institutions” - said Dmitry MEDVEDEV.

“We all understand that it is impossible to imagine more unfortunate decision than a significant increase of the tax burden in these difficult times,” - he stressed.

The Prime Minister said that the government has abandoned the idea of VAT increase, acknowledging that by doing so they will complicate the situation for our business even more. “But taking into account current situation, we should try to make the business environment more comfortable” - said Dmitry MEDVEDEV.

“We decided not to raise personal income tax in order not to reduce the income of our citizens, and decided to save the flat rate of taxation, although it has occasionally been criticized”, - he added.

“After a long discussion, we also rejected the idea of ​​introducing sales tax. Some regions, especially big ones, which should have to introduce these taxes on their territory at their own discretion, of course, would get additional revenue. Unfortunately, in this the case our people, especially given the more powerful inflation, would have very serious losses, and that is why we are refused to take such a step at the moment”, - said the Prime Minister.

“However, - continued MEDVEDEV - to increase the tax base of local governments, regions will have the right to introduce a number of charges for the right to trade, for the provision of catering services, taxi services, as well as tourist or resort charges. As for existing taxes, it is very important to improve their administration. Soon we will focus on restoring order when levying duty on alcohol. Even at a very conservative estimate, improved tax collection will bring an additional budget of 200 billion rubles”.